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Summary

"The book tells an interesting story about the workings of the Israeli economy. The author presents and interprets a rich array of historical material. At the same time, he shows a solid knowledge of economic theory as well as economic practice. Unlike other books about Israel, this volume captures the interplay between social, economic, and historical factors that permit one to have a broad understanding of Israel's economy." -- Robert Lerman, The American University

This book constitutes the first attempt at a comprehensive description, history, and analysis of Israel's economy. Plessner examines events of the past two decades and advances the hypothesis that problems within the Israeli economy can be explained by the extent of its departure from the institutions and rules that govern predominantly market economies. He argues that Israel is unusual in that it affords an opportunity to analyze a socialized economy embedded in a democratic society. Individual chapters describe Israel's economic growth and stagnation, the government's domination of capital and credit markets, and the absence of a truly independent private sector. The concluding chapter evaluates the stabilization program of the 1980s and its aftermath and provides a prognosis for the future. Told within the framework of the story of Zionism and the creation of the Jewish state, this book answers the question of why the Israeli economy finds itself today in the same state in which it has languished since 1973.

Yakir Plessner is Senior Lecturer in Economics at The Hebrew University of Jerusalem and Fellow at The Jerusalem Center for Public Affairs. He was formerly Deputy Governor of the Bank of Israel and economic advisor to the Minister of Finance.